Proposition 109 proposes amending the Colorado statutes to:

require the state to borrow up to $3.5 billion in 2019 to fund up to 66 specific highway projects;

direct the state to identify a source of funds to repay the borrowed amount without raising taxes or fees; and

limit the total repayment amount, including principal and interest, to $5.2 billion over 20 years.

Current state highway funding. Maintenance and construction of state highways are funded through the Colorado Department of Transportation (CDOT). CDOT receives most of its revenue from federal and state gasoline and diesel fuel taxes and from state vehicle registration fees, as shown in Figure 1. For state budget year 2017-18, CDOT spent approximately $1.2 billion, or roughly 85 percent of its revenue, on state highway maintenance and operations and $220.5 million, or 15 percent, on construction.

Bond sale and repayment. Proposition 109 directs CDOT to borrow up to $3.5 billion by selling transportation revenue bonds. The total repayment amount, including principal and interest, is limited to $5.2 billion. The bonds must be repaid in 20 years, and the state must reserve the right to repay the bonds ahead of schedule without penalty. Assuming the repayment schedule is for the full $5.2 billion over 20 years, the average annual repayment cost will be $260 million. Actual repayment amounts will vary depending on the terms of the revenue bonds.

Past bond sale and repayment for transportation projects. In 1999, voters approved the sale of $1.5 billion worth of bonds for transportation projects. The state was required to use the borrowed money to pay for up to 24 transportation projects across the state. Repayment costs for the 1999 bonds totaled $2.3 billion. The debt was fully repaid through various state and federal sources in December 2016.

Transportation funding commitments conditional on the outcome of Proposition 109. In the last two years, the state legislature passed two laws to increase funding for future transportation projects. In 2017, the state committed $1.5 billion for transportation projects through the sale and lease-back of state buildings. In 2018, the state devoted another $1.0 billion over a 20-year period for transportation projects from existing state revenues. Under current law, the $3.5 billion in proposed borrowing will replace these commitments, resulting in a net increase of $1.0 billion for transportation.

Road and bridge projects. Borrowed money under Proposition 109 may only be used for road and bridge expansion, construction, maintenance, and repair on the 66 transportation projects located throughout the state identified in the measure on pages 59 through 63. The funding provided through the measure is not enough to pay for all the projects identified in the measure; the estimated cost of the projects is $5.6 billion. The final selection and order of construction will be determined by CDOT and the Transportation Commission.